Where technology experts at Endsight share their expertise on IT Management, the issues that arise for clients, and the benefits of technology for medical practices, biotech firms, law firms, financial services and other small businesses in the San Francisco Bay Area.
Mar 30th, 2010
by Jason Clause Filed under: Email, Hardware, Hosted Services, Managed Services, Network Security, Outsourced IT Support, Software
There is a lot of noise about cloud computing. It’s fairly new and new is exciting. So what exactly is cloud computing? More importantly, why should a small business owner care?
The cloud is a metaphor used to describe the Internet. Cloud computing is building on that metaphor to describe using the Internet to deliver computing resources as a service. Broadly, cloud computing is the convergence of three technologies: server virtualization, utility computing and software as a service.
- Virtualization allows software to be separated from physical hardware.This in-turn, allows a single physical server to become 10, 50 or even 100 virtual servers.
- Utility / grid computing allows server capacity to be accessed across a grid of systems.This in-turn allows computing capacity to increase or decrease depending on user or resource demands.
- Software as a service allows on-demand software applications via the Internet to be purchased on a predictable monthly subscription basis.
This convergence allows a provider to aggregate many computing resources and profitably deliver those resources as a service for a fixed monthly fee.
The resulting delivery model is highly efficient, but it’s not the key reason for a small business to consider cloud computing. The key reason is best illustrated by looking back a century ago to the emergence of the national electricity grid.
Originally, if a business needed electricity it would have to build and fund the generating capacity on its own. Boilers, turbines and transformers were expensive and so only the largest firms could afford the new technology. The emergence of the grid allowed everyone access to electricity on a subscription basis. All one had to do was plug in. No more expensive capital projects.
In the modern era, mostly because of its size, a small business is inherently forced to either pay for more computer resources than it needs or to suffer with systems that won’t quite do the job. It’s an unwinnable contest that does not balance out.
Cloud computing gives a small business the ability to finally balance that equation by allowing them to pay for only the specific IT resources, service and support they need. Small businesses no longer have to lay out huge amounts of capital for servers, software and staff to build and maintain IT resources such as corporate email, shared files and accounting applications. Instead, they can plug into a computing cloud and access only the resources they need on a fixed fee subscription basis.
As with any new technology, there are a lot of options and providers to consider working with. If cloud computing is an option for your business, moving an on-premise computer network to the cloud needs to be thoroughly planned. For more information about cloud computing click here.
In addition to operating a private computing cloud, Endsight manages more than 100 on-premise computer networks. If you’d like to discuss your current situation and determine the cloud’s applicability to you’re business click here to schedule an in-person meeting.
Tags: Cloud Computing, grid computing, small businesses, utility computing
Dec 3rd, 2009
by Jason Clause Filed under: Business & Management, Email, Hosted Services, Managed Services
In my opinion, the key incite to glean from Pete’s article is that your data is probably worth WAY more than you think. In fact, it is likely the very life blood driving your organization.
Many of Endsight’s clients operate a service business. They count on the intellectual property locked in their email and business applications to meet their customers’ needs. For them, data is the business.
As Pete’s article notes, “The Department of Commerce has determined that 90% of companies which do not have access to data for more than 5 days go out of business within 1 year.”
By itself, that statistic is alarming, but in the Bay Area it’s further exasperated by this one:
On April 15 2008, the San Francisco Chronicle reported that The US Geological Survey believes “A strong and deadly earthquake is virtually certain to strike on one of California’s major seismic faults within the next 30 years”
I’ve reposted Pete’s article below and invite you to consider what kind of impact a “day without computers” might have on your business. If you find the impact as alarming as Pete, contact us and let’s talk about how we can help mitigate that risk.
I’ve embedded a slide deck to a free seminar Endsight has provided about disaster preparedness. If you belong to a professional association or business / community group that might have an interest in the topic, let me know and I’d be happy to present it. If you’d like more information about the presentation, Email me and I’ll send you a topic abstract.
The Value of Data: What is your data worth to your Organization
By Pete Heles, Founder/CEO Framework IT, LLC
What is your data worth?
This question is one that will have a unique answer to each and every entity in existence. There is no easy answer. This is obvious in the fact that this very question has been asked many times without a quantitative foundation for the answer. It is the objective of this document to assist you in better determining the value of your firm’s data, how to increase its value and ensure the ongoing retention of value.
In researching this question, there are several current themes for determining the value of an organization’s data. The most basic formula is the data of an organization is equal to one times annual revenue. This theory is supported by the fact that if a company’s data is lost or handed over to a competitor, the firm is worthless without it. This is a rather simple formula that points out a fundamental flaw in attempting to establish a universal formula for determining the value of data: The value of data has much to do with the type of organization.
A flower shop, a paint manufacturer and a not-for-profit cannot use the same formula. Think about a dental office: new data is established on each visit and the data collected from prior visits is mostly negated. In the dentist’s case, the security of the new data is far more important than the “old data” with the establishment of HIPAA Guidelines.
A flower shop has names, addresses, credit card information and transaction history. The credit card data is again important from a security risk stand point, but to say the value of a flower shop’s data is 1 times annual revenue seems to be grossly overstated, as the majority of the information can be collected from a variety of sources and the confirmation of credit card information can and should be done with each transaction.
The paint manufacturer on the other hand is very different. In the recent past, a specialty paint manufacturer was purchased by a sizable competing firm. Within 6 months of the acquisition over 90% of the acquired firm’s employees were terminated and all but 2 plants shut down. The data was the only thing of true value. The purchase price was 4 times annual revenue. Formulas and client data in the sole possession of the acquiring firm were deemed to have that significant value.
In today’s business environment Certified Public Accountants and the Federal Government determine the value of tangible assets. Merriam Webster defines tangible as “capable of being appraised at an actual or approximate value <tangible assets>.”
If a firm buys a list of names and addresses it is a business expense and the initial value is easily determined. That list becomes valuable data with use and definition by the firm for its profitable use. The additional data that is built along with the name that was purchased is of significant value. In theory, it is no longer an expense, but becomes an asset. Only the tangibility of value is at question.
There are other considerations that must be realized in determining the value of data. A basic factor in value is the cost to maintain and collect data. What is the budget for computers, software, support, and people in the data systems group at a firm. This is a statement, not a question, as this is a cost of data for any firm. If, in fact, that amount is treated as an expense, it must diminish the value of data by the same amount.
On the other hand, it has been determined by the management of the firm that the value of data will increase in an amount greater than the expense; otherwise it would be a bad business decision to incur that expense. Conclusion: the data processing staff at a firm is critical in increasing the value of the firm’s data. Unfortunately the value of data is too often determined by the purchase price of technology which is used to house the data. That is like telling someone the $1 bill in the $100,000 vault is worth a hundred thousand dollars! In 1978 when a 73mb disk drive was $38,000, was the data more valuable than today when a 300 GB disk drive is about $250? Be careful not to get caught in this determination of data value.
Issues for consideration
1. Is it goodwill? What is that in accounting terms?
2. Is a patent an asset, and how is the value determined?
3. Is data the same as intellectual property?
4. Increasing the value of Data
5. Protecting Data
6. Handling, use, and availability of Data
7. Misuse of Data
8. Where is the Data?
9. Role of individuals and Data
10. Assault on Data
11. Treating Data as an investment
The topics noted above are best answered by the key management of your firm with needed participation from both accounting professionals and lawyers. A strategy for the proper collection, use, protection, and ability to compound data and its value can be an eye opening project that WILL increase the awareness of and value to your firm’s data.
Before starting the process of determining the management of your firm’s data, take a minute to answer the following questions. If an employee took (embezzled) all of your company’s key client, vendor, and financial data to his new employer (a prime competitor of yours), what could the financial affect be to your firm?
If there were a fire (or other situation) that destroyed all the file servers in your data center, how long would it take for your firm to recover from this calamity?
What is the cost/loss per day to your firm if corporate data is not accessible?
What would the financial impact be to your firm if the data that was backedup could not be restored and had to be rebuilt from scratch? These numbers are actually larger than you initially estimate. The Department of Commerce has determined that 90% of companies which do not have access to data for more than 5 days go out of business within 1 year. Does this fact change the way you think about the value of your firm’s data? The protection and assured availability of your company data?
A thorough Business Continuity and Disaster Recovery Plan is a key part of ensuring the “Survivability” of your company in the event of a business interruption or serious data loss. It is estimated that less than 5% of unregulated* businesses have a current and thorough Business Continuity and Disaster Recovery Plan.* (Banks, financial institutions, and publicly held firms are some of the business types that are federally required to have a BC/DR Plan.)
As a business professional it is essential (and possibly legally required) that you protect your firm’s assets. After reading this article and answering a few simple (maybe complex) questions you should have a new appreciation for the value of your firm’s data and understand the need to be more proactive in the protection and assured availability of your data. Start the BC/DR Plan development process today.
Tags: Bay Area, disaster preparedness, Email, Endsight, Technology
Jun 25th, 2009
by Jason Clause Filed under: Hosted Services, Managed Services
It’s an interesting question. As small businesses, we will need to make sense of “cloud computing” and to try to determine what sort of impact, if any, this new concept will have on our business. Eric Knorr’s take on the difference between cloud computing and hosting is interesting. I think it does a fair job of trying to distinguish between the two concepts, but as with most articles I read, this is geared more towards the enterprise IT department.
Check our Eric’s article: http://www.infoworld.com/d/cloud-computing/cloud-computing-just-hosting-another-name-453?source=IFWNLE_nlt_blogs_2009-06-15
Basically, “cloud computing” is the industry’s new description for IT resources such as e-mail, being hosted somewhere other than on a server that sits in our office. One of the distinctions between “cloud computing” and “hosting” is that with the cloud, we don’t have any idea where our data resides. I think a great example of a “cloud” application would be Gmail. We can log into our mail from a Webpage but we don’t have any idea where the e-mail resides exactly. This is because Google has low-cost servers located all over the world and they use sophisticated load-balancing technology that moves information and data around their computing grid. This approach allows us to use e-mail as a service, but it limits our control over the data.
Hosting is similar to cloud computing in at the IT resource resides outside of our corporate computing environment. But unlike cloud computing, we know exactly, where our data resides. Hosted Exchange, a Microsoft product, is a great example of this concept. With this approach, e-mail resides off site at a co-location facility. We know where the co-location facility is and we know, where the server or in many cases virtual server is located. The same load-balancing concept applies to hosting in most cases, but it’s on a much smaller scale. And it’s managed by the local hosting company or IT partner as opposed to Google. The solution is less distributed, but it affords us more control.
Regardless of what we call it or the specific architecture we apply there’s a good chance that our next major computing infrastructure upgrade will be to the cloud. There’s just too many good reasons not to move services such as e-mail, file servers, and database applications out of our server closet and into a data center:
1. Disaster Recovery / Business Continuity: Moving our key server infrastructure to the cloud allows us to take advantage of all of the disaster preparedness countermeasures built into an enterprise class co-location facility. These buildings are constructed to withstand earthquakes, fires, power disruptions and other “acts of God.” They employ both physical and technological security that meets the most stringent regulatory requirements and most of them feature backbone access to the Internet with multiple redundant connections. The end result is that if a disaster strikes our office, our computer systems weren’t there to be destroyed. So long as our employees can access to the Internet, they can access our computing infrastructure and get back to work.
2. Scalability: Moving our servers to an enterprise class server and storage array that uses virtual technology allows us to access only the computing power that we need. As our business grows, we simply add more computing power. We don’t have to worry anymore about buying new equipment or what we will do with that equipment after a particular project is done.
3. Reduce Capital Costs: The cloud gives us the ability to pay a fixed monthly fee for our server infrastructure as opposed to laying out tons of cash to purchase all the equiptment we need for a major network upgrade. Instead, we only pay for what we need.
The key point that I gleaned from Eric’s article is this. In the small-business space, many offerings will be cookie-cutter. (Like Gmail) Small businesses using this service will not have the rich feature set that comes with an implementation of Microsoft Exchange. In my experience, a cookie-cutter approach for something like e-mail will not work for the vast majority of small businesses. As we explore our options for hosted or cloud solutions we need to be able to customize the offerings and service levels associated with those offerings.
The good news is that we won’t have to make these decisions immediately. Microsoft relseased Windows Server 2008 and developers will soon be releasing business software maximised for the new platform. The best way to explore a hosted / cloud infrastructure is too include it as an option in our next major upgrade.
Endisght is already talking to a number of clients about this option right now. Feel free to contact us if you’d like to talk about it to.
Tags: cloud, Cloud Computing, co location, computing environment, Eric Knorr, Hosted, Hosting, hosting company, Jason Clause, Managed Service, Outsourced IT, small businesses, small-business, Technology, virtual server
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